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As Southwest grows its international business, BWI could be a big winner

International expansion by Southwest Airlines into the Caribbean, Central America and, later, European markets will likely be a boon for BWI, according to the discount carrier’s chief executive officer.

Baltimore/Washington International Thurgood Marshall Airport has struggled to attract and retain foreign flights, and such an expansion by Southwest could reshape the airport’s limited international presence.

BWI has “been a candidate in our minds for as long as we’ve been thinking about expanding internationally,” said Gary Kelly, Southwest’s chairman, president and CEO.

Kelly, speaking at a BWI Business Partnership meeting Friday, called the international market a “great opportunity” for Southwest, and said foreign destinations could be reached with Southwest jets, or through a partner carrier.

The airline gained a toehold overseas with the acquisition of low-cost competitor AirTran Airways, which flies to the Caribbean and Mexico. Kelly said Southwest is eyeing those markets for further expansion, and other long-haul flights to Alaska, Hawaii and Canada.

“Eventually, I think we’ll want to consider flights from the East Coast to Europe,” he said. “BWI would be a very logical [location] to consider that kind of expansion.”

BWI’s William Donald Schaefer International Terminal opened in 1997 to great expectations that it has never lived up to. The airport has only five daily departures to international destinations, including a state-sponsored British Airways flight to London. Nearby Dulles International Airport in Virginia has 43 daily international departures.

“As they [Southwest] look more and more at the international market, we are in a prime position to grow this airport,” said Paul J. Wiedefeld, executive director of the Maryland Aviation Administration.

Southwest’s international aspirations will be aided by upgrades to its fleet, Kelly said. Known for flying only 737-700 aircraft, the airline is adding 737-800s. Those jets have 175 seats, compared to the 137-passenger capacity of the 700s.

“We think it is a more viable economic offering for longer-haul flights,” Kelly said.

The airline is also upgrading its flight reservation system to eventually allow for international bookings.

Southwest closed its acquisition of AirTran last month, and the two combined now account for 70 percent of the passengers who fly through BWI.

Kelly spoke of rising fuel costs, but said despite the dominant position Southwest holds at BWI, pressure from other airports nearby will help keep ticket prices low.

“We want to be the low-fare leader,” Kelly said. “We don’t want to nickel and dime our customers.”

Southwest and AirTran have little overlap in the flights offered from BWI. Southwest flies 195 daily departures from the airport — a record — and AirTran, 53. They share six destinations in Florida, as well as Boston, Milwaukee and New Orleans.

Kelly said the merger will allow planners to tie in major hubs like BWI and Atlanta, where AirTran has a large presence.

He said by the first quarter of next year he expects Southwest to have a license from the Federal Aviation Administration to operate as a single airline. AirTran planes will be painted and outfitted to look like Southwest jets, and some services will be consolidated.

That work at BWI will take about 18 months, Wiedefeld said.

AirTran will move from Concourse D to Southwest’s wing on the opposite side of the airport and add four to six gates to accommodate the extra traffic.